Injunction against social networking site too wide, rules European Court of Justice

The Court of Justice of the European Union has ruled that an injunction sought by Belgian collecting society, SABAM, against the operator of a social networking site is contrary to EU law. This latest ruling is consistent with the CJEU's ruling in December 2011 on a similar injunction sought by SABAM against the internet service provider, Scarlet Extended (reported here). It's clear from these two rulings that the CJEU saw no reason to distinguish between an internet host and any other kind of internet service provider. In both cases, the contested injunctions:

Fell foul of EU laws that prohibit Member States from imposing "general" obligations on internet intermediaries to monitor traffic or hosted content

Would have been complicated and costly for the intermediary to implement; again, contrary to EU law

Would have unfairly prioritised the rightsholders' property rights over users' privacy rights and rights to freedom of information.

Facts

Netlog is the operator of an online social networking platform. SABAM alleged that Netlog users were uploading and making available copyright works in SABAM's catalogue without SABAM's consent. SABAM asked the Belgian Court of First Instance to order Netlog to introduce a filtering system to identify and block the exchange of files containing works from SABAM's catalogue. Netlog contested the order, arguing that it was contrary to provisions in the Ecommerce Directive that prohibit Member States from imposing "general monitoring" obligations on internet intermediaries. Use of the filtering system would also have resulted in the processing of users' personal data and confidential information.

The ruling

Active monitoring: The CJEU agreed that the filtering and blocking system that SABAM wanted Netlog to implement would require Netlog to actively monitor almost all files stored by all Netlog users on its servers. This was "general monitoring" and therefore Article 15 of the Ecommerce Directive prohibited the national court from granting an injunction in the terms sought by SABAM.

Cost and complexity: To comply with the proposed court order, Netlog would have to install a new and permanent computer system at its cost. The system would have to monitor Netlog's servers for infringing copies not only of existing works, but also of future works added to SABAM's catalogue over time. Although rightsholders have the right to seek injunctive relief against intermediaries, national courts must not impose measures that are unnecessarily complicated or costly (Article 3(1) Enforcement Directive). The CJEU ruled that the proposed measures in this case did not meet this requirement.

Balancing the fundamental rights of users, Netlog and rightsholders: When fundamental rights such as property rights, privacy rights and freedom of information rights come into conflict, the courts must strike a fair balance between them. The CJEU concluded that use of the filtering system would have resulted in users' personal data being systematically identified and analysed, and that lawful content might mistakenly be blocked, undermining users' rights to send and receive information. The CJEU also took into account Netlog's freedom to conduct a business under Article 16 of the European Charter of Fundamental Rights. The rightsholders' property rights did not outweigh these competing rights. If the national court were to grant the injunction, it would fail to strike a fair balance.

Comment

Given the CJEU's decision in the Scarlet Extended case, the court's conclusions in Netlog are not unexpected. Nonetheless, the ruling is interesting in that it shows the CJEU applying the same principles to a different category of internet intermediary. Both decisions, along with the UK High Court decision in Twentieth Century Fox v BT (reported here) reinforce that, if rightsholders want to tackle infringing activity via injunctive action against an internet intermediary, then this route is most likely to succeed where the offending site is wholly dedicated to infringement and the measures to be taken by the intermediary are specific, targeted, simple to implement and not unduly intrusive of users' privacy.